SCMT 3643 Midterm Quiz Questions

Given that a company can participate in multiple ecosystems at the same time, __________________ becomes a valuable organizational capability.
… building business-to-business relationships…
Outsourcing means that…
…activities that were performed in a manufacturing facility are now performed by a company (a supplier) either in the same country or abroad.
Which of the following are true regarding carbon footprint and supply chain management?
All of the above are true

The carbon footprint is part of 70% of corporate agenda.
Many report green practices to contribute to increase profit.
More miles, more sources, more emissions, more management required.
All of the above are true.

Outsourcing and off-shoring are making…
… supply chains to be longer
Open borders, reduced barriers, cost effective long-distance transportation and low-cost labor markets resulted in supply chains to be
More complex
To manage the efficient and effective flow of products, management needs to balance…
… speed, cost, and quality.
Which of the following are true about carbon footprint across the supply chain?
(more than one can be true)
Environmental issues add to the complexity of supply chains and legislation about environmental issues is likely to increase complexity of supply chains
Inflation, increasing factory wages and longer ocean freight is…
… increasing near-shoring and re-shoring.
The importance of Supply Chain Management is reflected by:
All of the Above

The increasing importance of collaboration with supply chain partners
SC is a critical part that needs to be adapted to changes in business environment
SC capabilities are key to compete based on time-to-market
SC executives sitting in the Board
All of the Above

Off-shoring means that…
…activities that were performed in a manufacturing facility are now performed at a facility in a different geographic location in a foreign country owned by the same company.
The video suggests that in order to comply with regulations of a foreign country to sell food products there, it may be necessary to do all of the following, except to…
Remove gluten from the product
The example of selling organic cosmetics abroad is used in the video to suggest that …
For successful sales around the world, tastes, preferences, and needs of a much wider range of customers should be studied and understood
Which is NOT true of international logistics?
All of the above statements are true.

Internationally, it manages different logistics activities than domestic.
It manages logistics activities in different countries.
It manages logistics activities between countries.
All of the above statements are true.

What is the impact of international sourcing on inventory management?
Higher transportation and inventory holding costs
Which activity is a part of logistics management?
All of the above

Materials handling
All of the above

Which activity is a part of logistics management?
Which is NOT true of logistics management?
It does not deal with reverse flows of goods from the customer back to the manufacturer
What is the goal of logistics management?
It is to meet the customers’ requirements
Which complexities are common for international shipping operations?
All of the above

Dealing with multiple transportation modes.
Shipment coordination with multiple carriers, including in foreign countries.
Higher risk of product damage or delay.
Complexity of customs regulations.
All of the above.

What is NOT true of the time factor in international shipping?
Transportation lead times are very consistent
The 18th century economist David Ricardo explained that international trade is essential because…
…every nation has something they do best and if they trade with each other, both parties will live better.
The challenge for business people engaged in international trade is…
…to be aware of the multiple existing and proposed Free Trade Agreements because they will affect tariffs, labor costs, and local and regional legislation.
The WTO agreements provide the legal ground rules for international commerce. As such,…
…these contracts bind governments to keep their trade policies within the agreed limits
The key to unlocking the potential of future trade agreements lies in…
…reducing non-tariff barriers, frequently customs procedures.
The role of the World Trade Organization is…
…to provide a global forum for governments to negotiate trade agreements and to settle trade disputes.
Miller argues that a new supply chain discipline is nascent; he calls it Tariff Engineering. What is tariff engineering as Miller describes it? Tariff engineering is…
…the configuration of the global supply chain to take advantage of the lower tariffs and preferential treatments.
As a result of local and regional agreements among nations, the business environment is becoming …
…more complex and challenging
In addition to the agreements organized and approved by the WTO,…
…there are nations that have bilateral agreements or participate in regional groups to foster regional free trade zones.
Only a small fraction of business took advantage of the applicable FTAs in force because…
…management finds the requirements of the FTA so complex that the cost of adhering outweighed the advantages
The structure of the supply chain, where each supplier, manufacturing facility and distribution center, will be located is the result of the most productive configuration of a number of critical factors. The factors Miller identifies as critical include:
All are critical factors

Fuel and transportation cost
Location of existing suppliers
The needs of key customers
All are critical factors

The use of a strategically located FTZ may be a good choice as …
All of the above

a sourcing location
a manufacturing location
a distribution location
All of the above

What is an inverted tariff?
A higher rate on parts than on final products.
When are tariffs paid?
When goods are transferred from an FTZ into the country.
Which activities are allowed in an FTZ?
All of the above

All of the above

Which is NOT true of access to an FTZ?
All FTZs are open to all companies
In the US, FTZs function under supervision of the…
None of the above

None of the above

Which is NOT a benefit of an FTZ for the government and/or business community of the country it is located in?
competitive advantages for foreign companies over domestic competitors
Which is a potential benefit of an FTZ for a foreign company?
All of the above are benefits

delay the payment of tariffs (duties) to help with cash flows and foreign currency availability.
Reduce the amount of duties, including down to zero, when the product is transformed in an FTZ.
For re-exporting after manufacturing or assembly, take advantage of cheap labor compared to the country of origin and country of final destination.
Fix any non-compliance problems (e.g. labeling) to allow the products to enter the country legally.
All of the above are benefits.

The special status of a Foreign Trade Zone (FTZ) in the US means that …
an FTZ is not considered part of the US territory for customs purposes.
How can a foreign company take advantage of an inverted tariff using a public FTZ?
Bring parts into an FTZ, assemble the final product and transfer it into the country.
Which is NOT true of a location of an FTZ?
Only a few US states do not have an FTZ.
What of the following better represent Magna’s strategy?
Make parts for the top seller cars
What of the following best describes the situation in which Robert Peterson, the CEO of IBP, is in the caselet?
Peterson has a public relations issue because IBP has been regarded as manipulative, unfair, and possible even illegal
How many “caselets” are in the case Regarding NAFTA?

(This particular case is unique because rather than one story, the main story, extending NAFTA to Mexico, splits in more than one story)

The problem Francisco Solis, the Mexican VP at the Sony’s Nuevo Laredo plants, was…
… deal with a newly created agency under the auspices of NAFTA, particularly the U.S. National Administrative Office (NAO)
Having read all three caselets, what of the following are true?
This is a tricky question. Sebastian may be setting us up for takeaways from the case discussion
Magna International …
None of the other options are correct
What of the following is(are) incorrect?
Sony is new to operating in Mexico
IBP’s case is considerably important because…
… a bipartisan group of congressional representatives was urging remedial action
Sony’s main reason to establish an operation in Mexico was…
… because there was a requirement (protectionism) that all product’s key components, including materials and labor, had to be wholly North American in origin
What of the following are correct?
All of the above are correct
Tertiary packaging is also called…
… transportation packaging
What the customers see is….
… primary packaging
What of the following would you label as Breakbulk Cargo…
A piece of machinery that does not fit in a container and is heavier of the maximum weight of a container load.
When thinking about the customer service objectives for packaging, we should think of….
All of the answers are correct
What retailers handle is …
… secondary packaging
Containers used in air transportation…
… are not intermodal (inconvenient to use in other transportation modes).
This picture shows___________ being loaded.
Breakbulk cargo
Packaging provides protection. Against what type of protection does packaging provide?

1. Mechanical damage
2. Water damage
3. Theft
4. Pilferage

i, ii, iii, and iv
Effective and efficient logistics management results in …
… the right materials getting to the right place at the right time in useable condition for the lowest total logistics cost
What is the objective for the use of the marketing mix?
Customer service…
This is a tricky question, all of the above are right.
What is the output of the logistics function?
Customer service
_________ and _________ utility are provided by logistics.
time, place
What is a measure of the effectiveness of the logistics system?
Customer service
Lambert (1992) argues that effective, efficient marketing requires…
… management to fully integrate logistics and marketing within the firm’s strategic planning process.
The marketing mix includes:
Product, price, promotion and place
From Lambert’s point of view, what of the following are necessary for the long-term survival of the firm?
To be both a low cost producer and a value-added supplier
Lambert argues that…
… each element of logistics may vary from market segment to market segment, depending upon customer needs.
Which costs will need to be taken into account for BOTH domestic and foreign supplier in a more comprehensive and sophisticated calculation of total landed costs?
inventory costs
Total landed costs refer to the total cost of a product once it has…
arrived at the buyer’s door.
According to the video, which costs of dealing with a foreign supplier are NOT hidden or difficult to quantify?
transportation and insurance
Which part of the total landed costs should be taken into account for BOTH domestic and foreign supplier?
quoted price at the origin
Which is true of the total landed costs?
They ban be used to support decisions in manufacturing facility location selection.
To choose between a domestic supplier and a foreign supplier, the video recommends comparing…
Total landed costs
Why are total landed costs difficult to calculate?
All of the above.
The video likened the calculation of the total landed costs to the calculation of …
total logistics costs
In a final offer to win your business, a British supplier pledges to match the “FOB supplier dock” price of your current, Philadelphia-based supplier by offering you the same price (when converted to US dollars) for the same amount of products delivered to the Port of Philadelphia.
Given what you have learned about total landed costs in the video, what should you do?
Decline the offer, because the total landed costs for the British supplier are very likely to be higher when all factors are considered
Which part of the total landed costs should be taken into account for BOTH domestic and foreign supplier?
None of the above costs are part of the total landed costs.
ships specialized in carrying liquid bulk cargo
LNG Vessels
ships that carry Liquified Nitrogen Gas
Ore and Bulk Ships
ships with large compartments to carry loads of ore, grain, or coal
Combination Ships
special bulk ships that carry both liquid and dry bulk
General Cargo Vessels
generic name for ships that carry break bulk cargo of any kind
Break-Bulk Carriers
former name for general cargo vessels that carried pallets of goods and were located by stevedores
a type of general cargo vessels that carry containers
Roll on-Roll off Vessels
ships for transportation of vehicles that drive in and out of the vessel through a ramp
Which is another name for general, or packaged, cargo?
break-bulk cargo
Which type of an ocean carrier has the video likened to a city public bus service?
a liner
Containerized Cargo
products placed in containers
Bulk Cargo
cargo is free form with no packaging whatsoever
Break-Bulk Cargo
packaged products loaded individually
Neo-Bulk Cargo
unpackaged products loaded individually
Project Cargo
unusual cargo that cannot be routinely shipped
What is the main differentiating characteristic of a tramp?
a vessel that does not operate on a fixed schedule and is entirely chartered to one customer
What is the main differentiating characteristic of a liner?
a common carrier vessel that sails on a regular schedule and serves many customers
What is the maximum number of 40-ft containers a 10,000-TEU containership can carry?
neo-bulk cargo
Liquefied Natural Gas
bulk cargo
Frozen poultry in a 40-ft refrigerated (“reefer”) container
containerized cargo
Big Helicopter
project cargo
Industrial equipment in crates
break-bulk cargo
crude oil
LNG Vessels
liquefied natural gas
Ore and Bulk Ships
iron ore
Break-bulk reefer vessel
boxes of frozen poultry
frozen poultry in a 40-ft refrigerated (“reefer”) container
Roll on-Roll off Vessels
What types of ocean carriers were identified in the video?
private, liners, and tramps
a private carrier
Bulk and Break-Bulk Ships
a tramp
a liner
Malcom McLean is best known as a person who…
introduced containers to ocean shipping
What is the main differentiating characteristic of a private carrier?
a vessel owned by a shipper and used to carry its own products
neo-bulk cargo
bulk cargo
Gasoline in a 30-ft liquid bulk container
containerized cargo
Big hydroelectric turbine
project cargo
Concentrated grape juice in barrels
break-bulk cargo
Which cargo can be shipped as neo-bulk
automobiles, steel coils, and logs
Massive volumes of oil on a constant basis
a private carrier
Large volumes of cargo on an irregular basis
a tramp
Smaller volumes of goods on a regular basis
a liner
Sugar can be shipped as
containerized cargo, bulk cargo, break-bulk cargo
Which metrics characterize only the commercial (revenue earning) capacity of the vessel?
net tonnage and TEU
All the weight in tons that the vessel can carry
deadweight tonnage
All volume enclosed spaces in a vessel
gross tonnage
Volume capacity of the vessel, excluding the space for water, fuel, and supplies
net tonnage
A measure of capacity of containerships
twenty foot equivalent unit (TEU)
Which type of an ocean carrier has the video linked to a rental car company?
a tramp
Which fact was given in the video to show the importance of air cargo transportation for global supply chains?
Air cargo transportation accounts for approximately 40% of the world trade in value.
What is NOT an impact of larger aircraft on the airfreight industry?
use of larger aircraft has stimulated the growth of GDP of developed and developing countries alike.
Which is a top airfreight carrier?
Which products make little sense to be shipped by air?
bulk commodities
How have the yields changed in the airfreight industry in the last 20 years?
They have gone down.
Which decisions does the video recommend shippers make when it comes to shipping by air?
all of the above
Which is true of pallets or containers for airfreight?
they are used to carry the vast majority of airfreight
Airfreight rate for a single shipment is based on…
either its weight or volume
What options in terms of aircraft and service are available to an airfreight shipper?
all of the above
Denser cargo will be charged based on…
its weight only
Which are NOT premium rates?
General Commodity Rates
The system of airfreight rates is based…
on both weight and volume of the shipments
Which factor outside the airline industry has contributed to the consistent growth of airfreight over the years?
lower barriers to trade by governments around the world
Which is a type of product/industry that will NOT benefit from the unparalleled speed and reliability that airfreight offers?
coal for a power plant
Which is NOT true of air freight forwarders?
They use their own flight equipment
Which is NOT a benefit of transporting products by air?
It is more expensive compared to using ocean carriers.
The video provides examples of the many questions to consider when determining the best options for your shipment. Which is NOT one of them?
Can I pay with frequent flier miles?
Which are likely discounted rates?
Container Rates and Contract Rates
Which products make little sense to be shipped by air?
wheat grain
What is yield in airfreight?
revenue per freight ton-mile
Lighter cargo will be charged based on…
its volume only
Which of the following is not a performance metric of interest to global supply chains?
Market share
How does the author describe the metrics that are needed to manage global supply chains?
Timely, complete and actionable
What of the following is central necessary any global SC metric??
Supply chain costing
The author mentions that effective SCM requires reducing cost, increasing inventory velocity and compressing cycle time. What of the following is true?
Different product categories might require a different mix of these three objectives.
Which of the following is true regarding sources of costs in global supply chains?
This is a tricky question, all other options are true.
What of the following is NOT a characteristic of SCM Accounting?
Cost are calculated for discrete decision making event
How does the author describe the data that is necessary for making decision about international operations?
Accurate, timely and comprehensive
What of the following is true regarding the costs that have to be considered as potential candidates to understanding costs in Global Supply Chains?
This is a typical tricky question wrote by Sebastián, all other answers mean the same.
How do you calculate working capital tied in international trade?
Accounts receivables, plus the carrying cost of the inventory linked to the international activity minus accounts payable to international suppliers.
What of the following is does NOT make a difference to cycle time when considering domestic sourcing and offshoring?
Transportation lead time between the destination port and the distribution center.